Work on overhauling the tax code may be done in Congress, but for the rest of America, the job has just begun.

As the Internal Revenue Service prepares to roll out new federal income tax withholding guidelines by Feb. 15, experts are urging Americans to do their homework.

The new tax bill attempted to simplify the tax code for most Americans and decrease income tax liabilities so workers will be taking home more in their paychecks.

But the changes are significant enough to potentially disrupt your paycheck to the point where you may be deducting too much — or too little.

The W-4 tax forms — which companies use to predict how much a worker should withhold in federal and state taxes — are only as good as the information provided.

Though the government is trying to create a seamless transition from the old to new forms and ease the burden on taxpayers, experts caution against relying on the W-4 forms alone.

“Because of the complexity of everything that changed in the law, people should really revisit their allowances,” said Robert Duquette, a professor of practice in the College of Business and Economics at Lehigh University. “[The forms] really only work if you give an honest and accurate account of your situation.”

Now that President Donald Trump and the Republican Congress have gotten their tax-reform dream to come true, an army of tax experts and accountants are beginning the process of understanding how it will work in real life.

The law cut taxes for corporations and many individuals, but also instituted...

Now that President Donald Trump and the Republican Congress have gotten their tax-reform dream to come true, an army of tax experts and accountants are beginning the process of understanding how it will work in real life.

The law cut taxes for corporations and many individuals, but also instituted...

(Tim Darragh)

For those with a simple tax situation — a single source of income and few if any deductions — whatever automatic changes go into effect with the new tables and forms should be fairly accurate.

But more complicated scenarios could result in significant over- or under-withholding, Duquette said.

It will be the individual employee’s responsibility to have the forms adjusted for accuracy. Experts say most human resource departments will likely reach out to workers to let them know when the new guidelines are in place and they can begin to make such adjustments.

Patty Bernadyn, who is in charge of payroll for the Parkland School District, said Parkland plans to remind faculty and staff when they send out information about the 2017 W-2 forms, which include annual income and are needed for tax preparation.

“It’s in the news, it’s out there,” she said of the tax changes. “But we want to give [employees] a heads up. It’s a good thing as an employer to help your workers out.”

Bernadyn said the district has had inquiries about the tax changes from a handful of staff. The truth of the matter, she said, is that the breadth of changes in the law create a lot unknowns — at least until it’s time to file the 2018 taxes.

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Americans will have to get a better grasp of the tax law so they know what deductions and exemptions remain and which were eliminated, Duquette said.

Since the sweeping tax bill wasn’t passed until late last year, the IRS had to scramble to update withholding tables, which give guidance on how much should be withheld based on wages, marital status and the number of withholding allowances claimed.

As part of the equation to cut federal taxes for everyone, the GOP is proposing to do away or reduce some of the more popular deductions....

The tax reform bill put forth by Republicans in the House of Representatives is far from a done deal with tweaks and changes being floated seemingly by the hour.

As part of the equation to cut federal taxes for everyone, the GOP is proposing to do away or reduce some of the more popular deductions....

(Tim Darragh)

Revised W-4 forms will follow the new withholding tables. A possible sticking point for taxpayers will be whether the new forms factor deductions taken this month.

Since the deductions are based on the old tax rates, workers may have to do the extra math to make certain it doesn’t cause any surprises next tax season.

Andy Kahn, shareholder at Concannon Miller, an accounting and business consulting firm in Bethlehem, said there’s no reason to rush into making changes before understanding what it all means.

“It’s not a one-size-fits-all adjustment,” Kahn said.

The new tax bill increases the standard deduction and therefore encourages more people to file without itemizing deductions. Kahn said about two-thirds of taxpayers who previously itemized won’t be doing so in 2018.

But the bill also got rid of personal exemptions. The implication of this change may not have sunk in for many Americans, according to Chris Cocozza, head of DeSales University’s business division.

For parents such as himself, with multiple college-aged children in their household, it could be a significant loss in tax savings. Understanding how this could affect an anticipated refund could prompt different decisions on the W-4 form.

“The thought was that increasing standard deduction filings saves the day, but not so if you have multiple dependents,” Cocozza said. “This is a change that I think a lot of people really haven’t appreciated.”

Since such personal exemptions are gone, experts say the new W-4s will look quite different than they did.

This is where Duquette believes that the right kind of online calculator assessing a person’s tax situation can make a big difference.

In addition to the anticipated IRS calculator, Duquette said large tax preparation companies, such as Turbo Tax and H&R Block, will likely provide similar tools.

Many Americans rely on a tax refund every year, but with less tax liability for most people, those figures may decrease slightly, experts say.

The concern for some will be under-withholding and being hit with a large bill at the end of the year. Cocozza said for some families, a hefty bill rather than a windfall can be a devastating financial setback and guarding against that will be vital.